Ministry of Finance works to handle tax arrears

The Ministry of Finance is demanding more than 1.9 trillion VND (85 million USD) in tax arrears from EVN after uncovering that the group had failed to declare its costs accurately. (Photo: vnexpress.net)

Hanoi (VNA) - The Ministry of
Finance (MoF) is working on a draft resolution on handling tax arrears and
irrecoverable fines to submit to the National Assembly.

The MoF proposes to freeze tax arrears/debts.
This means it would temporarily cease collection of tax and late payment fines
for those who have terminated their business activities for more than one year,
due to actual dissolution of taxpayers (except for cases for splitting, merger
or acquisition), and those who already had their business licence revoked.

The
estimated uncollected tax amount of this particular group is now more than 26.5 trillion VND (1.16 billion USD), making up the majority of total unpaid tax
debt of around 1.18 billion USD.

The ministry also plans to
relinquish late tax fees for taxpayers who were struck by natural disasters,
fires, accidents or other force majeure circumstances.

Such exemption only applies to late
payments not exceeding the paid value and the suffered damage, which the MoF
estimated to be around 2.24 trillion VND (98.6 million USD) in total, as of the end
of 2017.

In particular, tax debt exceeding
the 90 days payment window accounted for more than 26 trillion VND (1.14 billion USD); overdue fines were more than 15.6 trillion VND (687.2 million USD); while
irrecoverable tax from deceased or incapacitated people accounted for over 31.4
trillion VND (1.38 billion USD), up to 43 percent of total tax debt and 3.2 percent of
total domestic revenue in 2017.

Meanwhile, the total amount of tax
arrears, late payments and fines under the management of customs in 2017 was
more than 5.4 trillion VND (237.8 million USD) - 70 percent of which is deemed
irrecoverable - having increased by 23.5 percent from the end of 2016.

The combined amounts of tax loss
under tax and customs agencies in 2017 amounted to almost half of the national
tax debts.

Unrecoverable debt levels have been
high in recent years, prompting tax authorities to implement drastic measures
to speed up enforcement and recovery of tax debts.

According to the General Department of Taxation, the tax branch
will implement changes in tax debts management in order to improve State
budget’s revenues in 2018, by associating tax recovery with administrative
reforms for taxpayers across all economic sectors.

In addition, the department will also
review debts that are possibly no longer subjected to collection, thereby
proposing appropriate remedial measures and reducing tax arrears.-VNA